Willard Foxton is an investigative journalist & television producer. He writes on skulduggery wherever he finds it, especially in the world of technology.

How much damage has Prism done to US tech giants?

The fallout from the Prism leak continues. As people digest what the leaks mean, ripples are going out into the business community. Firms were moving towards free, American, reliable cloud-based services; now things are screeching to a halt, as they think "do we want the NSA having access to this?"

It's more than just idle fear. Newspapers using cloud-based email systems have started communicating with confidential sources using other means. Of course, that throws up problems of its own, as the using of email encryption or anonymising software like Tor automatically marks you as higher risk in the NSA's calculations.

Firms which guarantee client confidentiality – doctors and lawyers, for example – have genuine worries about what could or could not be read. Law firms who regularly end up suing governments are especially worried. New details from the Snowden leaks says that the NSA routinely violates attorney client privilege if "foreign intelligence" is contained within. Even if the NSA doesn't actually end up reading the text of your emails, if you deal with anyone they are watching, you end up on a watch list – which is a recipe for airport harassment all over the world.

Silicon Valley is seen to be too close to the American security services. For example, when Facebook's chief of security left the social media giant, he went straight to work at the NSA. When big tech firms buy up their smaller rivals, they are keen to make deals with the state to improve intelligence access to those services. For example, since Skype was bought by Microsoft, its officials have refused to confirm Skype's original claim that calls can't be tapped, and have updated their privacy policies to demonstrate that they "cooperate with law enforcement as is legally required and technically feasible".

This doesn't just worry lawyers and journalists, it worries the tech industry itself, too. Firms like Amazon, Dropbox and Rackspace have bet the farm on secure, easily accessible cloud storage, and now the NSA looks like pulling the rug out from under them. Firms across Europe – like the French state-funded "Sovereign Cloud" – are looking to make a killing, exploiting the fears businesses have. Many IT professionals would rather have, say, French intelligence reading their data than US intelligence. For example, Mikko Hypponen, chief research officer at internet security company F-Secure, said to CNBC "If you are going to have a Big Brother, I'd much rather have a domestic Big Brother than a foreign Big Brother."

Perhaps the hardest hit is Canadian phone manufacturer RIM, who make the Blackberry phone. One of the last things going for the struggling firm was the perceived security of the Blackberry handset, and particularly the BBM instant messaging system. However, following on from the allegation last week in the Guardian that British intelligence was regularly "Penetrating the security on [G20] delegates' BlackBerrys to monitor their messages and phone calls", rivals to Blackberry in the secure messaging market have seen sales surge.

Redact, a small British firm that makes an allegedly unhackable secure messaging app, tell me their sales have gone up 400 per cent since the Guardian story on Monday. Obviously, they're flogging a product, but other firms are reporting similar effects – for example, anonymous search engine DuckDuckGo has reported huge traffic surges too. People all over the world are worried about the NSA and their links with Silicon valley – and that if European firms move quickly in this febrile environment around US spying, they might be able to steal a march on their previously untouchable rivals.